MEG Energy Corp T.MEG

nice report.

[cashtango00]

A solid but expected result for MEG.  The market still not buying the narrative that there will soon be a 25-30% return of capital to many of these energy plays.  Interesting to note that TD has 12 month target of 21cdn and RBC is 23 CDN for MEG although their models are based on 80-85 WTI and 18-20 WTI/WCS spread.  If you are more bullish on energy, those models seem low in valuation.  Nuttall has WTI at 150 and WTI/WCS spread at 10 so he's got MEG at around 45.  Nuttalls numbers are ridiculous so my belief is we are somewhere in the middle.  Keep in mind, MEG's royalties go up near the end of 2022 as they hit payout on the project, so that will adversely affect cashflows.  I think MEG will have a decent move in the next 12 months, probably into the mid to high 20s, but WTI is the big wildcard obviously.

[Moemoney42]

Agreed it is a nice report.. shocks me to see MEG in the red currently..??  This company is printing FCF by the buckets full and will be for years.. enough to completely cancel all debt in a year or two..! What's not to like..?

[jack4567]

Well, if you follow a certain crowd (which I don't recommend doing), you would look at Yahoo Finance and see that MEG shows a significant EPS miss for Q3.  That's their end of story.

[cashtango00]

EPS miss is an accounting write down.  It is a non cash charge that measures nothing.  FCF is where its at but don't try to explain why to anyone on Yahoo.  toxic novices that are for the most part clueless.

[churchofnutsacc]

EPS miss means algos automatically sell. Same thing happened when Q2 was released. It was like the algos were caught off guard that production numbers were down for Q2, even the company warned us there was maintenance issues. 

[cashtango00]

Algos don't blindly sell on EPS numbers.   Look at Suncor.  Had a massive writedown on Fort Hills of over 3 billion that was a non cash accounting entry pulling them into a 600m loss on net earnings but they still did well over 3b in FCF  and the market loved the report.  

[churchofnutsacc]

Well, the exact same thing happened in Q2. The selling after Q2 was as if it was a production miss, rather than pre announced maintenance issue. Who knows how these robots operate. 

[cashtango00]

I worked in the industry and although I did not work in that area, I have a basic understanding of how algos work and there is no way they would blindly buy or sell based on a headline number.  That would be suicide, especially in resource stocks where reserves and infrastructure are written down and revalued based on transactions and volatile commodity markets.

[HighOctane89]

I gotta agree cashtango , there is something else happening here that makes me question what I am missing . Today's trading was totally divorced from the sector or the market trends and I don't believe that a yahoo finance blurp was the reason . I said yesterday today's trading would come down to the talkingheads spin but to be honest , bnn never mentioned MEG once today . MEG has no

[45yessss]

Folks--I disagree--Nutall makes MEG his top pick every tme--its getting plenty of hype and noise---I'm thinking its impatience on our part. It's just getting out of debt perison. Its now clear sailing and my guess is $25 by next quarter--unless CVE pounces and acquires MEG

[Renofund]

heavy oils will be a little frustrating until WCS differencials shrink.  As soon as it starts to show a meaningful move, it will rip. Until then, have fun complaining aboht algos, bad PR, whatever.  That aint it.  You invested in a heavy oil pureplay.  It is trading as such.